Hopes for Greek deal rise as prime minister, EU see progress

Greece's Finance Minister Yanis Varoufakis arrives at the Finance ministry in Athens, on Tuesday, April 28, 2015. The European Union says that talks with creditors to keep Greece from going bankrupt "are being made more productive and efficient" as the country faces a growing cash crunch.

BRUSSELS — Hopes for a deal on Greece's bailout rose on Tuesday after the prime minister said he expected an agreement could be reached within two weeks and the European Union reported a pick-up in the negotiations.

Greek stocks rose and its sovereign borrowing rates dropped, a sign that international investors are less worried about the country defaulting on its debts in coming weeks.

The European Union said Tuesday that Greece's talks with its creditors were "being made more productive and efficient" as the country faces a growing cash crunch.

EU Commission spokeswoman Annika Breidthardt said the pace of talks has "intensified" since a weekend meeting of eurozone finance ministers, where Greek minister Yanis Varoufakis came under intense pressure from his colleagues.

Prime Minister Alexis Tsipras said in a television interview that ran into early Tuesday that he expected a deal would be reached by May 9, in time for the next eurozone meeting.

Greece has to repay the International Monetary Fund a total of almost 1 billion euros by May 12. It is expected to have enough money to make that, if it manages to raise as much as it hopes from a move to grab cash reserves from local entities like hospitals and schools.

But it faces bigger repayments in June it will struggle to honor without more bailout cash.

Breidthardt refused to elaborate on reports of the sidelining of Varoufakis as the prime contact in the bailout talks beyond saying ministers were happy to talk to any Greek representative, "as long as they have a mandate to negotiate."

Varoufakis has been blamed by several officials as the main cause for the lack of progress in the bailout talks. At a eurozone meeting last week in Riga, Latvia, he again failed to come up with a list of economic reforms creditors are demanding in exchange for the loans.

Euclid Tsakalotos, minister of international financial relations and a close ally to Prime Minister Alexis Tsipras, will now handle the coordination within Varoufakis' negotiating team.

Greece's finance ministry said the political negotiating team led by Varoufakis was meeting Tuesday night in parliament to work on a bill including the reforms suggested by the minister.

Greece's main stock index was up 1.7 percent whereas other European markets were over 1 percent lower. Greece's bond yields — a gauge of investor concerns about default — fell sharply. The two-year yield was down over 3.8 percentage points at 20.1 percent.

In 2012, when fears of a Greek exit from the euro were at their peak, the rate was at 120 percent